$1.4b gas field announced but no gas until 2015

Oil giants ExxonMobil and BHP Billiton will develop a $1.4 billion gas and oil field in Bass Strait, as Australia moves to reduce its reliance on brown coal.

But gas will not start flowing from the Turrum reserve, off Victoria's Gippsland coast, until 2015 — five years after an emissions trading scheme is due to start. Oil production, however, will begin in 2011.

Construction of the platform, 40 km offshore, will start next year under one of the biggest Bass Strait projects in more than 40 years.

ExxonMobil Australia chairman, Mark Nolan, said the field would help secure eastern Australia's energy demands but did not envisage a need to tap into Turrum gas supplies until 2015.

"We have sufficient gas in our other fields to meet the market growth in the meantime," he said.

The Turrum field has a 20-year life span and contains one trillion cubic feet of gas and 110 million barrels of oil and liquid gas.

"That's enough energy to supply a city of a million people for over 20 years," Nolan said.

Federal Energy and Resources Minister Martin Ferguson said Turrum was an important contributor to meeting future energy security challenges.

"This is important for Australia because at the moment if we don't actively find more oil and gas opportunities in Australia we are facing a trade deficit of petroleum products of more than $25 billion by about 2015."

The Turrum project is a joint venture between ExxonMobil's subsidiary Esso Australia and BHP and will create up to 100 jobs during construction.